Nintendo Fined $146 Million For Price Fixing
- October 30, 2002 10:17 AM PST
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The company's European division gets slammed for running a "price cartel" across the continent. No wonder Euro gamers are always complaining about prices.
The European Commission fined video game maker Nintendo Co. Ltd. and their European distributors 167.8 million Euros ($165 million) Wednesday for its role in a price-fixing cartel, the Commission's fourth-biggest fine against such a crime."Nintendo, together with seven of its main European distributors, colluded to prevent imports of the games from one European market to another," Commission spokeswoman Amelia Torres said. "The Commission will not tolerate behavior intended to keep prices artificially high in the European single market."
The illegal price collusion between Nintendo and seven of their distributors took place between 1991 and 1998, according to the Commission. During that time, the price of Nintendo's games varied widely between the fifteen European Union member states. For example, in 1996, prices in the U.K. were 65 percent cheaper than the prices charged for the same products in Germany and the Netherlands, Torres said.
The cartel "prevented millions of European citizens from being able to buy Nintendo games at the cheapest prices," she said.
Nintendo will appeal the Commission decision, it said in a statement. The Kyoto, Japan, company accepts the finding that its distribution practices did not comply with EU competition rules and had accounted for the decision in its financial planning, but finds the size of the fine "surprising."
The appeal comes a week after the Commission lost two appeals of its competition rulings in the Court of First Instance in Luxembourg, Europe's second highest court.
Nintendo for its financial year through March 2002 reported 116.16 billion yen ($875.7 million, based on exchange rates at the time) in sales to European customers, 20.9 percent of its total sales to customers outside Japan, according to the company's financial report for that year.
The seven Nintendo distributors also fined by the Commission are John Menzies PLC, U.K.; Concentra - Produtos para crian?as S.A., Portugal; Linea GIG. SpA, Italy; Bergsala AB, Sweden; the Greek unit of Japan's Itochu Corp.; Nortec A.E., Greece; and the Belgian unit of Germany's CD-Contact Data GmbH.
